A firm has an equity value of $30 million and debt of $40 million. There are 4 million shares outstanding. The debt is perpetual debt (its dollar value doesn't change over time) and the debt cost of capital (and the interest rate on debt) is 3.00%. The firm has expected cash flows of $6 million each year, starting next year, after which these expected cash flows will grow at a rate of -3% per year. Assume the CAPM holds and that the risk-free rate is 2% and the expected return on the market is 6%. Assume the M&M assumptions hold.

a) What is the weighted average cost of capital, rA?

Enter your answer as a decimal (not as a percent) rounded to four (4) decimal places.

b) What is the equity cost of capital, rE?

Enter your answer as a decimal (not as a percent) rounded to four (4) decimal places.

c) What is the firm's expected earnings per share (EPS) next year? $

Enter your answer rounded to three (3) decimal places.